Liu Feng from Shanghai University of International Business and Economics: Ebang International's IPO is more difficult than Canaan Technology

According to Beijing Business Daily, Liu Feng, director of the Blockchain Technology and Application Research Center of the Institute of Artificial Intelligence and Change Management of Shanghai University of International Business and Economics, said that similar to Canaan Inc.'s listing, Ebang International's listing mainly faces difficulties in maintaining business profitability and regulatory constraints. However, Canaan Inc.'s successful listing is also reflected in chip research and development and sales. As a chip company, its listing is more reasonable. Although Ebang International also has research and development, its core income still comes from mining machines. Therefore, it is more difficult to go public than Canaan Inc.
Liu Feng said that Ebang International's IPO on the US stock market is similar to Canaan Technology's listing on the Nasdaq in 2019, both of which were after the company failed to list on the Hong Kong Stock Exchange. The core reason for this move is still that the company does not meet the "listing adaptability" requirements. First, the mining machine business is heavily dependent on the price of the virtual currency trading market, and the market fluctuates too much, which leads to the instability and lack of sustainability of the main business. In addition, most of Ebang International's operating companies are registered in mainland China, and the business legal environment is not satisfactory. The current supervision does not recognize the virtual currency trading market, so there is a great deal of legal uncertainty.
In Liu Feng's opinion, the current pain point in the development of Bitcoin mining machine manufacturers is that the business that contributes to revenue is too single. If they rely solely on the sales of mining machines and parts as the only source of income, they will be restricted by the volatile virtual currency market, bringing instability in profits.
Regarding the future development of Bitcoin mining machine manufacturers, Liu Feng suggested that on the one hand, they still need to develop their own core technologies, improve computing power, reduce costs, and build their own technical barriers. On the other hand, they can expand the diversified income business structure. For example, mining machines not only provide blockchain computing power, but also divert part of the computing power to support artificial intelligence, big data, and cloud computing. Only through diversified business can the company's core competitiveness be improved.
It is reported that after two failed attempts at listing on the Hong Kong Stock Exchange, Bitcoin mining machine manufacturer Ebang International intends to go to the United States for an IPO. On April 24, Ebang International submitted a prospectus to the U.S. Securities and Exchange Commission (SEC). However, the prospectus disclosed that Ebang International had a net loss of US$41.07 million, a debt of US$57.04 million in 2019, and was involved in a lawsuit. In the view of analysts, a series of business risks, regulatory risks and legal risks have added a lot of uncertainty to the company's listing.
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